Washington recently passed sweeping legislation dubbed the “One Big Beautiful Bill Act” (BBB) — and it’s packed with changes that could impact your financial picture. We’ve summarized the most relevant updates below, using bullet points to make it easier to scan. If any of these changes apply to you or someone you care about, let’s talk.
🔹Key Changes to Tax Deductions & Exemptions
Many popular provisions from the 2017 Tax Cuts and Jobs Act were set to expire. The BBB not only extends them — it locks many in permanently.
Income Tax Rates & Brackets
- All current tax rates and brackets are made permanent — no sunset clause this time.
Standard Deduction (Effective 2025)
- Raised to $15,750 for single filers (up from $15,000)
- Raised to $31,500 for married couples filing jointly (up from $30,000)
- Future increases will be tied to inflation
SALT Deduction (State & Local Taxes)
- Annual cap increases from $10,000 to $40,000
- This cap will rise by 1% each year until 2030
- In 2030, the cap reverts back to $10,000
- Begins phasing out at $500,000+ in income
Estate & Gift Tax Exemption
- Increased to $15 million for single filers (up from $13.99M)
- Increased to $30 million for married couples (up from $27.98M)
🔹Tax Credit Updates
Child Tax Credit
- Increased to $2,200 per child
- This replaces the old $2,000 credit and is now permanent
- Earlier versions proposed $2,500, but that did not pass
Green Energy & EV Tax Credits
- These incentives are being phased out:
- EV credits expire on September 30, 2025
- Energy-efficient home upgrades (solar, HVAC, etc.) expire after December 31, 2025
- If you’ve been considering these investments, now may be the time to act
🔹New Deduction That May Lower Social Security Taxes
You may have seen headlines suggesting Social Security benefits will no longer be taxed. That’s not quite accurate, but here’s what is happening:
New Senior Deduction (2025–2028 Only)
- Individuals 65+ can deduct $6,000 if annual income ≤ $75,000
- Married couples 65+ can deduct $12,000 if combined income ≤ $150,000
- Phases out completely at:
- $175,000 for individuals
- $250,000 for couples
- This deduction can reduce overall taxable income, which may reduce or eliminate taxes on Social Security benefits
- However, it’s not an automatic exemption on Social Security — it depends on your full tax picture
- Let’s run the numbers together to see how it applies to you
⏳Note:This deduction is temporary and expires after 2028
🔹New Tax-Advantaged Child Savings Accounts
If you're planning to welcome a new child or grandchild between 2025 and 2028, there’s a new opportunity worth noting:
Child Savings Accounts
- Available for children born between 2025 and 2028
- Government contributes a $1,000 one-time deposit at account opening
- Parents and relatives can contribute up to $5,000 per year
- Employers can also contribute up to $2,500 annually
- Earnings grow tax-deferred
- Withdrawals (starting at age 18) are taxed as long-term capital gains
Considerations:
- Designed for long-term savings (education, major expenses)
- May be helpful — but other savings vehicles (e.g. 529 plans or custodial accounts) may be more flexible
- There are complex rules, so let’s talk before opening one
🔹Final Thoughts
The BBB is one of the most wide-reaching tax laws we’ve seen in years. Here’s a quick recap of why it matters:
✅ Tax rates are locked in — reducing future uncertainty
✅ Higher standard and estate deductions offer more room for planning
✅ Some credits disappear soon — now may be the time to act
✅ Retirees may benefit from the new deduction — but careful analysis is key
✅ Young families gain a unique (but temporary) savings opportunity
At Windjammer, our role is to help you navigate shifting tides like these. Whether you're planning for retirement, managing taxes, or saving for the next generation, we’re here to help you make informed, forward-thinking decisions.
If you’d like to discuss any of these changes — or simply review how your plan is positioned — feel free to reach out. These updates could present an opportunity to fine-tune your course.
Your Financial Navigator,
Johannes
Sources
- “ONE BIG BEAUTIFUL BILL ACT,” Congress.gov
Windjammer Wealth Advisory does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.